Even though most Americans are currently living paycheck to paycheck, they’re still planning to spend a record amount over the holidays.
“As of November 2023, the share of consumers living paycheck to paycheck sat at 62%, unchanged compared to the same period last year,” said results of the latest the Reality Check: Paycheck-To-Paycheck report from PYMNTS and Lending Club Bank.
A survey of 3,252 U.S. consumers conducted from Nov. 6 to Nov. 22 and an analysis of other economic data was used to compile the report. While 77% of consumers earning less than $50,000 annually lived paycheck to paycheck as of November 2023, 67% of those earning between $50,000 and $100,000 also did, and 45% of consumers earning more than $100,000 did.
“These shares have also remained stable since last year, indicating that U.S. consumers, in the face of ongoing inflation, have adjusted their spending where they can and still see their financial obligations outpace their incomes,” the report said.
In early November, the National Retail Federation predicted that – as most Americans faced pressure to tighten spending – they still intended to go all-out for the holidays. It forecast that spending would reach record levels in November and December and grow between 3% and 4% over 2022 to reach more than $957.3 billion.
Around Thanksgiving, Audacy reported on data from research firm Cicana that showed consumers spent 7% less from mid-October to mid-November. Circana’s chief industry advisor, Marshal Cohen, said that consumers were holding back in the fall.
Conservative spending ahead of the holidays didn’t seem to mean Americans were planning for a lean holiday season. Gallup polling from November found that Americans planned to spend $975 on Christmas and other holiday gifts this year.
“This exceeds consumers’ holiday spending estimate from a year ago by more than $100 and is the highest in Gallup’s November measures historically since 1999,” said Gallup.
According to the survey from Lending Club and PYMNTS, paycheck-to-paycheck cardholders are more than twice as likely as those not living paycheck to paycheck to carry an unpaid portion of their credit card bills over to the following month, known as revolving.
“Among all consumers, revolving has increased relative to 2022, with 43% of cardholders doing so at least occasionally in 2023 (up from 41% in 2022), highlighting a concerning shift over the past year,” said the report.
Although the economy did not do as poorly as some expected this year, Americans still face financial challenges such as high inflation.